Budget Day 2026 for entrepreneurs
The following changes may be at hand
The governments plans presented on budget day 2027 outlined various measures that may have consequences for you as an entrepreneur. Ranging from start-up tax-deductions to company cars: In this article we outline the most important potential changes, and how they could effect you.
Please note: the plans from the 2027 Tax Plan have yet to be discussed by the House of Representatives and the Senate. So they are not yet final. As the cabinet does not have a majority, many plans require support from other political parties. The General Political Considerations have now taken place although broad support from the opposition has not yet been expressed. In the coming months, the individual budgets and Tax Plans will be discussed further. The plans therefore may be subject to adjustments.
Employee stock options
Is your business a start-up or scale-up? Then you will soon be able to reward your employees more easily with stock options. Employees pay less tax on stock options. The law that regulates this (Start-ups and Scale-ups Tax Incentives Act) is expected to take effect on January 1st 2027.
Tax increase on tap water
Is your company using a large quantity of drinking water quality tap water? Then you will have to pay a higher rate of tax on your tap water consumption from 2027 (BoL). The rate will increase by approximately € 0.11 per m³ to € 0.551 per m³. In addition, the levy ceiling for large-scale users will be abolished. As a result of this, your business will be liable for tax on every cubic metre of tap water used. For companies with high water consumption, this will entail a noticeable cost increase.
CO2 tax and waste tax
Do you incinerate, landfill or export waste? The government intends to adjust the measures in the 2026 Tax Plan (to your advantage). The CO2 tax from the 2027 plan will be postponed from 2030 until 2035, when the new rate of € 304 per ton of CO2 will be applied. A new plan was also presented aimed at reducing the tax burden on refuse from 2028 onwards. A new rate of € 64 per ton has been put forward as opposed to the planned rate of € 92.82 per ton of waste.
VAT rates
As of January 1st 2028 the reduced rate of 9% VAT enjoyed by the floriculture and floristry sector could be increased to the general rate of 21% under the governments new proposals. This would apply to all floriculture products. VAT on balloon flights is also set to rise from 9% to 21% from January 1st 2028.
Income tax
Are you self-employed with a sole proprietorship, general partnership or other non-legal entity? Then you may have to pay more income tax in 2027 and 2028. Income tax will go up because the tax brackets and tax credits will not be fully compensated for inflation. In 2027, the inflation adjustment standard will be applied for 48%. In 2028, this is likely to be 12.2%. The rates in the first and second brackets will be increased by 0.06%.
Transfer tax
Does your company own housing that you rent out or hold as an investment? Changes have been proposed regarding the transfer tax you are liable for when you sell your real estate. According to the plans, the general rate for homes that are not used as a main residence will go from 8% to 7% as of January 1st 2027. It may be advisable to consider theses proposed changes for future real estate negotiations. The rate for other real estate, such as business premises, will remain the same.
Innovation box
The government intends to make an investment of more than 3 billion euros in innovation funds from 2027. This allows the maximum lump sum within the innovation box to be increased from €25,000 to €100,000. If you develop innovative products or services with your company, then this tax plan may be beneficial for you. With the increase in the lump sum, the tax benefits on corporate income tax for your Business may increase.
Employee deduction
Does your tax partner work in your company and do you make use of the co-working partner's deduction? This will be reduced by 75% from January 1st 2027. The scheme will end completely in 2030.
IOAZ
From January 1st 2028, entrepreneurs will no longer be able to apply for the Income Provision for Older and Partially Disabled Self-Employed Persons (IOAZ) benefit. Nothing will change for entrepreneurs who are already receiving an IOAZ benefit at that time.
Regulatory burden
The government aims to make significant additional savings in the next ten years by scrapping and simplifying rules. The Budget Memorandum states that 200 million euros per year must be cut in 2028 and 2029. In the Budget Memorandum, D66, VVD and CDA proposed even larger cut-backs than stated in their previous plans.
Start-up deduction
The government plans to end the start-up deduction in the event of disability from January 1st 2029. From January 1st 2027, the start-up deduction will decrease from €2,123 to €10. Actually, the deduction would disappear completely as of 2027, but that turned out to be unfeasible for the tax authorities. As it stands currently the start-up deduction will end completely on January 1st 2028. The arbitrary depreciation for starters will end at the same time as the start-up deduction.
Business discontinuation relief
The cessation deduction will also be phased out. From January 1st 2027, it will be reduced from €3,630 to €908. The deduction will stop completely in 2030.
Excise duty
Do you sell beer, wine or other alcoholic beverages? As of 1st January 2027, the alcohol excise duty will increase annually in line with inflation. In addition, the reduced excise duty rate on petrol and diesel will remain in place: the government wants to extend the current excise tax discount by one year until January 1st 2028. The discount on excise duty on LPG will not be extended.
Flight tax
The high rate of flight tax for long-haul flights will increase less than planned by 2027. Below 2,000 km this becomes € 31.04 per passenger, up to 5,500 km: € 49.87 and for more than 5,500 km you pay € 59.43 per passenger.
Young-timer vehicle scheme changes
According to the documents presented on Budget Day, the Young-timer scheme will be relaxed. The age limit will be adjusted (again). As of January 1st 2027, the scheme will apply to cars aged 17 and over, instead of 16 (2026). From 2028, the limit will be further increased to 20 years. If you drive an older company car, this could be beneficial for you.
Minimum Youth Wage
From January 1st 2027, the minimum youth wage for employees aged 16 to 20 will increase. This brings the minimum youth wage closer to the regular minimum wage.
Staff discount
The rules for employee tax credit are also expected to change as of January 1st 2027. The current specific exemption whereby employees can receive a maximum of 20% discount on their employer's products up to € 500 per year will expire.
Are you prepared?
The proposed changes have consequences for different types of entrepreneurs and companies. Some measures will take effect as early as 2027, others will follow in 2028 or later.
In a previous article, we explained what the 2026 coalition agreement can mean for you as an entrepreneur in terms of tax and budget. You can find out more regarding the upcoming changes at the entrepreneurs square. The budget proposal documents and a summary of the most important measures can be found here on the governments website. Would like to know more about the proposed fiscal plans could impact your business? Please feel free to contact us. We are happy to help you going forward.